2018 (1) TMI 618 - AT - Central Excise

Tribunal rules in favor of appellants on Central Excise duty issue

M/s Bright Enterprises Private Ltd., Ms Sonica Malhotra Director & Mr. Nimit Gupta Finance Manager Versus Commissioner of Central Excise & Service Tax, Noida

The Tribunal ruled in favor of the appellants, finding that the extended period of limitation for demanding Central Excise duty was not applicable due to ... SSI Exemption - use of Brand name - It appeared to Revenue that the appellants are using the brand name of Radisson below the words chocolate box on the packing material - extended period of limitation - Held that: - extended period of limitation is not invocable in the facts and circumstances, as admittedly the appellants were all along registered with the Central Excise Department/Services Tax Department. They had been filing their service tax returns which have never been found to be untrue and rejected by the Revenue. The earlier show cause notice dated 03/06/2009 was finally settled in their favour and refund allowed in July, 2010. The appellants had suo motu taken registration under Central Excise, in March, 2014 for manufacture and clearance of branded confectionery - there is no case of mis-interpretation, suppression or concealment of facts is made out against the appellants - the extended period of limitation is not invocable. So far the normal period is concerned I find that there is no demand for the normal period as admittedly the appellants have taken registration since April, 2014 and are paying duty in accordance with law as advised - SCN not maintainable - appeal allowed. Issues involved:1. Applicability of extended period of limitation for demand of Central Excise duty.2. Liability of the appellants for Central Excise duty on dutiable food items.3. Imposition of penalties on the appellants.4. Admissibility of Central Excise duty on certain food items like tea, coffee, juice, and lemonade.Analysis:Issue 1: Applicability of extended period of limitation for demand of Central Excise dutyThe appellants argued that the extended period of limitation was not applicable as they were registered with the Central Excise Department and had filed accurate service tax returns. The Tribunal agreed, noting that the earlier show cause notice was settled in favor of the appellants, and no objection was raised during an audit by the Commissionerate. The Tribunal held that there was no evidence of misinterpretation, suppression, or concealment of facts, thus ruling that the extended period of limitation was not applicable.Issue 2: Liability of the appellants for Central Excise duty on dutiable food itemsThe appellants were accused of manufacturing and selling dutiable food items without paying Central Excise duty. The Tribunal found that a major portion of the confectionery produced was consumed in-house for services like restaurant and banquet hall, on which service tax was duly paid. The Tribunal ruled that excise duty should be charged on the cost of the product, not the MRP, in accordance with CAS 4 guidelines. The Tribunal concluded that the show cause notice for the normal period was not maintainable as the appellants had obtained Central Excise registration and were paying duty as required by law.Issue 3: Imposition of penalties on the appellantsPenalties were imposed on the appellants and specific individuals under Rule 26 of the Central Excise Rules, 2002. The Tribunal upheld the penalties imposed on the appellants' company and the Director, but reduced the penalty on the Finance Manager. The penalties were imposed based on the findings of the Commissioner in the Order-in-Original.Issue 4: Admissibility of Central Excise duty on certain food itemsThe Tribunal discussed the liability of Central Excise duty on items like tea, coffee, juice, and lemonade. It was observed that these items were not served in packed conditions and were for immediate consumption, thus not liable for excise duty. The Tribunal agreed with the Commissioner's decision to drop the demand for duty on these items.In conclusion, the Tribunal allowed the appeals, set aside the impugned order, and granted consequential benefits to the appellants based on the detailed analysis of the issues involved in the legal judgment.